U.S.-EU trade talks

Wednesday, February 27, 2013

President Obama announced in his State of the Union address that his administration would soon launch talks with the European Union on a transatlantic free trade pact. U.S. and EU tariffs are low – 5.2 percent for the goods entering the European Union, 3.5 percent in the United States – but the sheer volume of trade between America and the 27 EU members is so large that one-third of all tariffs on U.S. exports to the world are paid to the European Union. Collectively, the EU bloc is the largest U.S. trading partner.
In addition to lowering tariffs, talks are intended to harmonize product standards and trade rules, match up regulations, address investment services and open doors for certain products.
A study by the U.S. Chamber of Commerce in 2010 found that eliminating tariffs would boost transatlantic trade by more than $120 billion within five years. Further, because one-third of transatlantic trade is intra-firm, eliminating tariffs will enhance the competitiveness of U.S. and European companies around the world, the business federation said.
The European Union already has free trade agreements with Canada and Mexico.
Experts say it should be easier for the United States to resolve differences and negotiate a trade deal with the European Union than with other countries because both governments share similar standards for safety, security and consumer protection.